Facebook Is Holding An Ax Over The Neck Of Foursquare

One of the stranger mysteries of Facebook's $1 billion
acquisition of Instagram is this: Why does Facebook allow
Instagram to use Foursquare for photo-location services when
Facebook has its own location app, Check In?

Facebook and Foursquare are competitors. They both have "check
in" services that create a huge location "underlayer" database
for the internet, showing where people are and what they're doing
there.

Foursquare has only 40 million users. Instagram has 150 million.
It's entirely possible that Instagram users are creating more
Foursquare data than Foursquare users are. (A spokesperson for
Foursquare declined to say what portion of the company's data
comes from Instagram.)

We spoke to a couple of sources inside Facebook who gave us the
same rough explanation: Instagram began using Foursquare to tag
photos with locations a long time before Facebook bought the
company. Zuckerberg has a "hands off" attitude toward Instagram,
which is a fantastic product that he is letting develop on its
own. He has no desire to screw with a winning team. Also, the
Instagram team has much bigger priorities than location services
— it's gearing up to
serve video ads sometime soon. And, frankly, Foursquare works
pretty well on Instagram, so why mess with it?

Nonetheless, Facebook is still able to evict Foursquare from
Instagram any time it wants, seamlessly replacing it with the
Facebook's Check-In feature.

A spokesperson for Foursquare tells us that Instagram is just one
of 50,000 app developers who use Foursquare for location
services. Other huge apps include Waze, Uber, and Evernote. In
terms of location data, "Foursquare is probably the most robust
out there," the spokesperson says. He denied that Foursquare was
in any way dependent on Instagram. "There's not an over-reliance
on one over the other," for any app, he says.

But that answer also restates the underlying long-term problem:
Waze — the traffic map app — is owned by Google, and Google is
building its own location database through a service called
Location Sharing in Google+ and Google Now. So in theory, Waze
could switch out Foursquare in favor of Waze's own user-data and
Google's Location Sharing data.

Foursquare has the same problem with Google that it does with
Facebook, in other words — some of its biggest clients are now
running competing services.

Of course, Foursquare's live, real-time data is likely a lot more
robust than either Facebook's or Google's. But the latter pair
have larger user bases.

So the ax isn't set to fall ... yet. It may never. But it
certainly exists.